RT KEISER REPORT – May 22, 2018: Max: Well, we have discussed this many times and I am glad to see that it is finally getting some recognition out there in the financial press. This phenomenon of neo-feudalism coming back into the economy due to rampant “mergers and acquisitions” fueled by free money. So what this all means is the number of stocks traded on the New York Stock Exchange and other exchanges is shrinking, because these companies are being bought out – they are being taken private using leverage buyout.
Just to refresh people’s memory: A leverage buyout is that you are using collateral of a company you are set to acquire as the collateral for the money you need to borrow to buy that company. And then after you buy the company you return money borrowed to the bank that was borrowed too you based on the fact that you had put up the collateral of the company you are acquiring. Just think about that for a second: In other words, during the Mike Milken days, corporate raiders like Carl Icahn or Ron Perlman, they would go Mike Milken and say here’s a company, they’ve got billions of dollars worth of assets on the books. I want to put their assets up as collateral to borrow the 10 billion dollars I need to buy them . And they would buy them. And then they would split the company up into many pieces and fire lots of people, and raid the pension accounts and destroy capitalism as we know it and make off with billions of dollars and we ended with with America’s oligarchy, a billion-year corporate raiders, which we now call “activist investors”. The trend has resulted in terminal capitalism, where the rats have been given unlimited credit and no regulations and they are killing the golden goose.
Soon, there will be no stocks to buy at all. No opportunity to excel at all. And we are back to serfdom, it’s the road to serfdom for real. Not that fake version that reference fake communism, but the real road to serfdom brought on by unfettered capitalism. …
Max: …We are entering a period of rising interest rates… I predict in 24 months (into 2020) you will begin to see the biggest wave of “mergers and acquisitions” ever in history by a factor of 10. As just 30% or 40% of everything that gets traded out there gets gobbled up and taken private.